8-KShareholder MattersCorporate ChangesOther Events+1

JPMORGAN CHASE & CO 8-K Report, Rights Modification (Jan 22, 2014)

Filed January 22, 2014For Securities:JPMJPM-PCJPM-PDJPM-PKJPM-PLJPM-PMJPM-PJAMJBVYLD

Summary

JPMorgan Chase & Co. filed an 8-K on January 22, 2014, to report the issuance of its Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series S. This issuance involved 200,000 shares of preferred stock, represented by 2,000,000 depositary shares, with each depositary share representing one-tenth of a preferred share. The filing details the establishment of the Series S Preferred Stock through a Certificate of Designations, outlining its rights, preferences, and limitations. An important feature for investors is that the terms of the Series S Preferred Stock include restrictions on the company's ability to pay dividends or make distributions on its common stock or other junior preferred stock if it fails to pay dividends on the Series S Preferred Stock for the most recently completed dividend period. This structure prioritizes payments to Series S Preferred Stock holders, which is a key consideration for existing and potential equity investors.

Key Highlights

  • 1JPMorgan Chase & Co. issued 200,000 shares of Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series S, on January 22, 2014.
  • 2These preferred shares were represented by 2,000,000 depositary shares, with each depositary share equaling one-tenth of a preferred share.
  • 3The Series S Preferred Stock establishes specific dividend and distribution payment priorities over common stock and junior preferred stock.
  • 4The company's ability to pay dividends on, or make distributions with respect to, its common stock or junior preferred stock is restricted if it fails to declare dividends on the Series S Preferred Stock.
  • 5The filing includes the Certificate of Designations, which details the rights, preferences, and limitations of the Series S Preferred Stock.
  • 6The issuance was conducted under an Underwriting Agreement and registered via a Form S-3 registration statement.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the completion of the issuance and sale of JPMorgan Chase & Co.'s Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series S, and to provide details regarding the establishment of the rights and terms of this new preferred stock class.

The 'non-cumulative' feature means that if a dividend payment is missed for a particular period, it is not carried forward to be paid later. The 'fixed-to-floating' feature indicates that the dividend rate will initially be fixed and then transition to a floating rate based on a benchmark, likely over time. For investors, this means potential for variable income in the future.

The Series S Preferred Stock has preferential rights. If JPMorgan Chase & Co. does not declare dividends on the Series S Preferred Stock for the most recently completed dividend period, the company's ability to pay dividends or make distributions on its common stock or any preferred stock ranking junior to the Series S Preferred Stock is restricted. This prioritizes payments to Series S Preferred Stock holders.

The 200,000 shares of Series S Preferred Stock were deposited with Computershare Inc., a depositary. This deposit resulted in the issuance of 2,000,000 depositary shares, with each depositary share representing one-tenth of a preferred share. This structure is common for making preferred stock more accessible to a wider range of investors, often traded on exchanges similarly to common stock.